Chapter II

STATE TRADING CORPORATION - A HISTORICAL

REVIEW

The idea of establishing an agency to handle foreign

trade was first mooted during the war by the Indian comtnerclal
commijualty Itself which feared that the operations of the
United Kingdom Conunerclal Corporation In India would deprive
Indian nationals not only o£ the profits of export trade but
also of the benefits of trade contracts with some other
countries. Their arguments were that if in the abnormal
circumstances of war it was not possible for the normal trade
to f\anction, the Government should establish an Indian agency
to handle trade with countries with which private exporters
were unable to trade. It was also suggested that an organi-
sation of this nature was very suitable for dealing with
foreign purchasing missions which were operating in India at
that time and which were believed to have depressed prices by
their bulk purchases and canalised trade into specific directions
often to the disadvantage of Indian nationals. But because of a

1 Gupta, K.R., Working of State Trading in India, S.Chand &

Co. (Pvt.) Ltd., New Delhi, 1971, p. 44.

69
 70

number of reasons, the suggestion was not followed up. Towards

the end of 1947 and the early part of 1948/ the subject cropped
up again. it was pointed out that while other countries were
charging India very high and even discriminatory prices for
foodgrains imported by her, the Government of India, by leaving
the export trade to private traders, had not allowed substantial
profits to be pocketed by them but missed the opportunity of
charging the maximum possible prices which the foreign markets
c.pul'd bear. The matter was examined and the Government
decided to levy export duties on cloth, manganese, oil seeds
and vegetable oils so as to mop up the wide margin between
internal prices and export prices. In March 1948, the matter

was raised in the Central Legislature on a cut moved by Shri

2
R.N. Goenka. In March 1948, the subject was put before the
Central Legislature on a motion brought up by Shri R.N. Goenka.
The subject of the creation of a state trading organisation
was widely discussed and it was argued that the establishment
of such an organisation would help to promote the foreign trade
of the country to a great extent. It was further asserted that
for price stabilisation and for controlling excessive fluc-
tuations in the pricing structure, the creation of an indepen-
dent agency like the state Trading Corporation was essential.
This question was examined in detail at that time and it was

1 Government of India, Report of the Committee on State

Trading (New Delhi, 1950), pp. 2,4.
2 Gupta, K.R., Working of State Trading in India, op.cit., p.45,
3 Sainy, H.C., India's Foreign Trade: Its nature and problem.
National Publishing House, New Delhi, 1979, p. 232.
 71

recommended that a State Trading Corporation should be estab-

lished to control and regulate export and import business in
some selected commodities. But no action could be taken on
these recommendations due to severe opposition from the
Economic Committee of the Cabinet,

In March 1949, Shri K.C, Neogy/the then Union Minister

for Commerce, pleeded in favour of the establishment of a
State trading organisation, for business in some selected
commodities and for bringing about bilateral trading arrange-
ments. In April 1949, the question of state trading in cotton
piece-goods and the establishment of a separate State Trading
Corporation were taken up by the Union Ministery of Commerce,
but it could not succeed due to the conclusion reached by the
2
Ministry that the proposal was not feasible. in 1949, Indian
currency was devalued due to the lowering of the currency of the
United Kingdom. The necessity of the establishing the State
Trading Corporation was again felt on this occasion. The
Government of India appointed a Committee on State Trading
under the Chairmanship of Shri Punjab Rao Deshmukh in the year
3
1949. The Committee recommended that a state trading under-
taking should be established -

(1) to take over the state trading activities of Government

department such as the import of foodgrains, fertilizers,

1 Ibid., p. 232.
2 Ibid., p. 232.
3 Ibid., p. 234.
 72

steel and coal;

(2) to take up, in addition, the import of East African

cotton and the export of short staple cotton and
cottage industry products, and

(3) to sponsor negotiation on behalf of private importers

and exporters and enter into trading operations with
monoplly organisations established in other countries.

The Committee further reccxnmended that from certain luxury

goodd (the prices of which were generally high) additional

revenues could be earned if these transactions were performed

through a state trading organisation. The Committee examined

the case of state trading in certain selected ccmvnodities and

recommended it strongly. These recommendations could not b«

Implemented by the Government as the idea of establishing of

State Trading Corporation was posponed. A second committee with

Shri S.V, Krishnamurthy Rao as its Chairman was formed at the

end of the First Five Year Plan which considered this subject

seriously. This Committee was of the opinion that creation of

an organisation was quite necessary in the prevailing circum-

stances. It recommended state trading in the export of handlooms

and the import of foodgrains, cotton, fertilisers, etc. But

like the Punjab Rao Deshmukh Committee's recommendations, the

observation of the Second Committee could also not be any

help. The Taxation Enquiry Commission was of the opinion that

1 Ibid., p. 234.
 73

the existing machinery should be so reorganised that the full

benefits of a state trading corporation could be secured. It
further suggested that state trading would be successful only
in tiroes when prices had a tendency.

Keeping in view the changed economic conditions in 1953«

a Committee of three was oppointed to review the recorranenda-
tions. Difficulties were being experienced in diversifying
and expanding India's foreign trade. The development of
trade was handicapped due to lack of experience and understand-
ing on the part of private traders in India of the trading
practices followed by trading organisations in state controlled
ecomies. The centrally planned countries tried to overcome
this difficulty by setting up trade representation on a suffici-
ently large scale, the trade representatives functioning more
or less as local agents of parent import and export organisations
in their respective countries. The trade representatives were,
however, finding it difficult to establish commercial contracts
with private parties in these countries. The Government
naturally hesitated to recommend suitable importers or
exporters.

Besides the reluctance on the part of some of the estab-

lished firms to handle trade with the centrally planned
countries, individual traders who under existing conditions
had to negotiate sale and purchase agreements in competition
with one another, were placed at a great disadvantage in
 74

concluding deals with monopolistic trading organisation. It

was felt that these difficulties could be overcome only if a
state trading agency intervened between Indian traders and
monopolistic foreign trade organisations of the centrally
planned countries.

The Government was persuaded by the Committee to think of

State Trading. The instrument of quantitative regulation of
imports had^ in the case of sane essential commodities, where
local production fell short of increasing demand, proved
Inadequate for maintaining a steady price level or an equili-
2
brium between supply and demand. in case of raw silk, it
became necessary to canalise imports from China through the
Central Silk Board. Import by private parties of small quotas
fixed by the Government from time to time only led to the
creation of artificial scarcities which made it possible for the
importers to charge exorbitant prices from handlocxn weavers.
The same type of difficulties were faced in the case of soda
ash, caustic soda and sodium bicarbonate. But the experience
had shown to the Government that its economic policies in regard
to commodities like soda ash could be implemented only if
imports were arranged through a monopoly or quasi-monopoly
organisation sponsored or reorganised by the State. Bulk
imports through a State agency were expected to help the
Government to hold the prices at a reasonable level and to

1 Gupta, K.R., Working of State Trading in India,"op.cit.,

p. 49.
2 Ibid., p. 49,
 75

regulate supplies in the market in a wayso as to serve the

interests of both consumers and producers of the items confemed.

In order to finance developmental imports« the need was

felt to expand and diversify exports. There existed a large
market for several non-traditional goods like handicrafts,
footwear and other products of cottage industries. Production
in this sector was carried on by a large n\imber of widely
scattered small scale units which were not only handicapped
by a lack of finance but were also ignorant of the markets.
The established exporters did not take much interest in
promoting the export of such items. Need was, therefore, felt
for State trading in this field.

Difficulties were experienced in the export of iron ore

and manganese ore. private Indian shippers, coitpeting with
one another, were confronted with large monopolistic buyers
abroad. This resulted in lower export price and consequent
loss of foreign exchange. Failure of private trade to honour
contractual obligations damaged the reputation of the country
in foreign markets. "By the very nature, trade, in these
ores is amenable to bulk handling. Long term contracting
could yield better terms of trade and ensure better production
and employment in the mineral industry."

The recommendations of several committees as discussed

above, regarding the need of.a state trading set up, could not

1 Ibid., p. 50.
 76

bear fruit for a very long time, A S has been discussed earlier^
the East European countries conduct foreign trade operations
mostly through such government undertakings and hence there
developed a niimber of trade bottlenecks. This attracted the
attention of the private entrepreneurs who argued for the
establishment of a centrally sponsored agency for dealing
with these institutions in the East European countries,

A resolution seeking the establishment of the State Trading

ml

Corporation was moved in the Lok Sabha on 26 August and 9th

September, 1955, The motion was waxrmly discussed and opposed
by a number of members including the then Minister of Convnerce.
In the end, in November 1956, the proposal was accepted by
the Cabinet.^ It was decided to establish the State Trading
Corporation of India Limited as a registered joint stock
company under the Indian CcMnpanies Act, Hence, the State
Trading Corporation of India (Pvt.) Ltd. (STC) was registered
on 18th May, 1956, under the Indian Companies Act, 1956, as
a joint stock company. The word 'Private' was eliminated from
the name of the company with effect from the 6th April, 1956.
At that time its authorised capital was Rs, 1.00 crore which
was raised to Rs. 5 crores in the year 1958-59. Its initial
paid up capital was Rs. 5,00,000. This was further raised to
Rs. 10,00,000 in October 1956 and Rs. 1 crore in Marcy 1957.
In the beginning, all the shares totalling Rs. 1 crore were
subscribed by the Government. This subscribed capital was
1 Ibid., p. 50.
 77

enhanced to Rs. 2 crores in the year 1958-59, The share capital

of the Corporation is divided into shares of Rs. 100 each.
The Corporation was intended to serve as an instxrviraent for
executing the foreign trade policy of the government.

In June 1962, another Government organisation called the

Indian Handicraft Development Corporation of India Ltd, was
made a subsidiary of the S,T,C. and all its paid up shares of
12,000,000 was purchased by the parent organisation which was
2
empowered to appoint or remove the directors on its Board.
In October, 1962, the Handlocm Export Organisation, a part of
the S.T.Cwas transfoimed into a subsidiary of the Corporation
whose name was changed to Handloom Export Corporation of India
Ltd. These steps were taken with a view to ensuring better
coordination and concentrated efforts for promotion of exports
of handloom aind handicrafts.

Keeping in view the fast growing foreign trade and the

effective role of the S.T.C. in the development of country's
economy and to keep it from becoming unroanagable in the wake
of long-term plans envisaged for the furtherance of the
exports from India and the imports entrusted to its care, the
government found it advisable to bifurcate the S.T.C. into two
by forming a separate cojrporation named as the Minerals and
Metals Trading Corporation of India Ltd. This new Corporation
came into existence on 1st October, 1963. It took over all the

1 I b i d . , p . 52.
2 Salny, H . C . , I n d i a ' s F o r e i g n T r a d e , NAtl^^jpttaSZ^^^Kl^
House, New D e l h i , 1979, p . 235. '^^^ - ^-"^f^^.
 78

assets and liabilities pertaining to minerals and metals

trade from the State Trading Corporation of India Limited
from that date. This organisation has been established to
organise and regulate India's foreign trade in minerals, ores,
and concentrates and other related commodities including iron,
steel and other alloys. This institution also deals with the
internal distribution of minerals, ores, concentrates, and
metals including iron, steel, their alloys and other related
materials.

Objectives of the State Trading Corporation

The main function of the State Trading Corporation la

to broden and enlarge the scope of India's exports and to
arrange for essential imports on economical basis. The Corpora-
tion is engaged both direct and indirect trade and brings
buyers and sellers together. It assists in the conclusion
and implementation of contracts, obtaining import licences«
guaranteeing quality and performance, and using its good
offices in matters like the settlement of disputes.

The objects of the State Trading Corporation, as contained

in the Memorandum of Association are:

(1) To organise and undertake trade generally with state

trading countries as well as with other countries in
commodities entrusted to the company for such purpose

1 Memorandom and Articles of Association of the State

Trading Corporation of India, p. 1.
 79

by the Union Government from time to time, and to

undertakd the purchase, sale and transport of such
commodities in India and anywhere else in the
world.

(2) To undertake promotion of exports generally including

exports to exporting markets whether of traditional
commodities or any other, to explore new market for
traditional items with a view to maintaining, diversi-
fying and expanding the export trade.

(3) -To undertake at the instance of the Union Government

'import and or international distribution of any
commodities in short supply with a view to stabilising
prices and rationalising distribution.

(4) To generally implement such special arrangements,

for imports, exports, international trade and/or
distribution of particular commodities as the Union
Government may specify in the public interest.

(5) To barter, pledge, exchange, manipulate, treat,

prepare and deal in merchandise, commodities and
articles of all kinds and to carry on any kind of
commercial and/or financial business as the company
may determine from time to time.

(6) To buy, sell, exchange, install, work, repair, alter,

refine, improve, manipulate, prepare for market,
let out or hire, plants, machinery, equipment, works,
vehicles, apparatus and appliances, boats, barges,
lighters, bulk carriers, etc., which are necessaxry
or convenient for carrying on any business which the
con^any is authorised to carry on or is required by
any customer or a person dealing with the company
and to experiment with and to render marketable, process.
 80

convert, fabricate and manufacture such articles,

commodities and goods as may be necessary or may
seem to the company capable of being undertaken
conveniently in furtherance of its objects or may
be calculated directly or indirectly to enhance the
value of such articles, commodities and goods.

(7) To manufacture, store, maintain, sell,buy, repair,

alter, exchange, let or hire, export, import and
deal In all kinds of articles and things (including
all kinds of conveyance and all component parts,
fittings, tools, implements, accessories, materials,
and all articles and things used or capable of being
used in connection therewith in amy way whatsoever
which may be required for the purposes of any business
of the company or are commonly supplied, dealt with
by persons engaged in any such business and which
may be capable of being profitably dealt with in
connection with any of the business of the company.

The State Trading Corporation devoted the first year

of its existance largely to exploration of markets, formula-
tion of policies, experimentation with business methods and
techniques of establishment of contacts with buyers and
sellers both in India, and abroad. The Corporation has been
trying to negotiate link arrangement with foreign firms so
that essential items may be imported against the export of
Indian manufactures. A number of such arrangements were
conducted with countries like West Germany, Viet Nam and
Hungary,
 81

Performance of State Trading Corporation

The Corporation has provided tremendous opportunities

to the State agencies to achieve the objects of checking
the leakage of foreign exchange and simultaneously curtail-
ing the malpractices prevelant in the country in the form of
over and under invoicing in foreign trade. It has acted as a
shock absorber and has given expert advice to the government
on policies of price establisation. It has thus been possible
for the government to remove certain structural weaknesses in
India's foreign trade. The Corporation has reaped enoxmous
profits from the conduct of bulk agreements, barter and link
transactions and promotion of rupee trade with the countries
of Eastern Europe. It established a human hair "Wig India"
Plant on January 31, 1967 in Madras which is equipped with
most modem machinery and has trained and skilled workers.
It is an achievement that the exports and imports business
presently undertaken by the Corporation have recorded an
iiamenae increase. For example the exports recorded a 27
per cent increase and the imports rose by 25 per cent over the
previous years during the year 1970-71. The Corporation is
thus emerging as a viable unit since it has been able to curtail
its losses on development exports. The Corporation has covered
new ground through certain important activities like link,

1 Annual Report of STC 1970-71. The Corporation's develop-

ment losses however on export were Rs, 5.5 crore during
1970-71, while this figure for 1969-70 was Rs. 1.78 crore.
 82

barter and parallel deals with reputed undertakings abroad,

in order to 'arrest the downward trend in exports and thus
save a considerable amount of foreign exchange on essential
imported items". It has been possible to explore new
potential in the fields of foreign trade with the help of
such transactions.

The well known EASI (Export Aid to Small Industries

Scheme) was started by the Corporation to evolve sound tra*-
ditions and promote exports of goods manufactured by small
scale and medium sized industries. It has provided all the
requisite facilities to such units, e.g., availability of
raw materials, provision of finance, expansion in the
production capacity of such units, giving expert advice in
the field of pioblicity, packing, designing, pricing, shipment
and transportation, follow up of import entitlement and
provision of advice and various technical aspects of export-
import trade like insurance, customs clearance, negotiations
of c«ranercial docximents and letters of credit, conduct of
export market surveys, training of workers, etc. Thus the
Corporation is providing several facilities to units which
require a fillip for covering new grounds in export trade.
It is also extending valuable services to the exporters as a
••recourse party" for foreign bills, where it permits a credit
facility to foreign purchasers upto a period of 120 days and

1 Ibid.
 83

for which it pays 95 per cent of the price to the Indian

exporters. This has resulted in a tremendous growth of
exports under the EASI Scheme. The Corporation is success-
fully running a scheme entitled "Preparation for Export"
which has been greatly welcomed in the industrial circles.
It needs to be mentioned here that this scheme is being
implemented by the Corporation under the EASI Scheme. The
Corporation has established a network of publicity offices in
oyex^eas markets in order to arouse the interest of foreign
buyers in the products of the small scale industrial sectors.

The Corporation has also achieved commendable results

in conducting internal trading operations in several
comnodities, e.g., in cement, purchase and sale of imported
cars and a number of essential items.

The Corporation was entrusted with the task of the distri-

bution of cement in the country soon after the promulgation
of the Cement Control Order (on 1st July 1956). At the
initial stages the Corporation has to face a number of technical
problems. As a result of this order, manufacturers and
producers of cement started earning huge profit by indulging
in the black marketing of cement at exorbitant tates. This
resulted in bringing a great disparity in cement prices in
the country.

1 Annual Report: State Trading Corporation 1957-58. ft

 84

The Corporation started purchasing cement from the

producers and attempted to organise the distribution of
this scare commodity in an efficient and systematic way. The
Corporation had to bear some losses at the initial stages.
It peforms its functions of cement distribution with the
help of various selling agents all over the country who were
paid a ncxninal commission. The Corporation did this work in
a commendable manner till the issue of the Cement Decontrol
Oi^der on 1st January 1966. After the promulgation of this
order, the Corporation has no longer been concerned with the
distribution of cement.

The Corporation is also entrusted with the purchase and

sale of imported cars brought into the country by dlplOBnats
and other privileged persons. The State Trading Corporation
prepares a priority list for the disposal of these cars in
consultation with the Government and sells these vehicles
to indenters belonging to priority categories and also through
open tenders.

The Corporation also acts as the Government's representa-

tive for undertaking exports of commodities produced by the
various public sector undertakings in the country, e.g.. The
Hindustan Machine Tools Ltd., Indian Telephone Industries
Ltd., Hindustan Antibiotics Ltd., Integral Coach Factory,
Hindustan Instruments Ltd, and the like.

The State Trading Corporation is the largest shareholder

 85

in the Indian Motion Pictures Export Corporation set up in

1963 for promotion and diversification of exports of Indian
films. It plays its role as a catalytic agent in initiating,
regulating, supervising and actual performance of the
activities of this Corporation in export and import trade.

The Corporation,in addition to export of several new

commodities, had made it possible to iinport various essential
items and capital equipment without putting a drain on the
country's scarce foreign exchange resources. It has brought
a new trend in India's export performance by promoting the
2
export of commodities handled by it. It also provides
requisite facilities to the private entrepreneurs and exporters
to explore potential markets in various regions. Thus India's
foreign trade with different regions has been increasing
substantially. The Corporation has also provided significant
help to different export promotion agencies established in
the country. It prepares annual regionwlse plans for trade
with foreign countries, conducts on the spot surveys with
the help of the private sector and thus plays a significant
and vital role in the formulation as well as final implemen-
tations of export strategies. It is an important phenomenon
to be noted here that "all credits for imports and debits
for exports are channelled through a central account maintained
in rupees without actual transfer of funds between the two

1 Annual Report of the State Trading Corporation 1965-66.

2 Sainy, H.C., India's Foreign Trade, p. 246.
 86

coxintries" and finally the settlements are made In non-

convertable rupees.

One cannot, however, claim that this state owned piiblic

undertaking is without defects. It has a special set-up and
peculiar norms of working because it has also been prod\x:in9
a number of goods as per government policy and implement the
distribution policies of the government along with producing
a few coRvnodities like human hair wigs. Hence this Corporation
does, not have to face drawbacks and short-cotnings like labour
troubles« organisational lacuna etc. from which the other
public sectors undertaking suffer greatly. But still the
prominent defects which are found in almost all the state-
onmed and state-operated units are prevalent In the State
Trading Corporation too. It exhibits several features of
bureaaratic control, lack of long-range thinking. Inflated
costs which cramp initiative or foster Inefficiency, lack of
decisiveness on account of which most of the workers become

quill drivers, resulting in waste, delays and the unwleldly

2
over-grown size of the departments.

During the last few years there had been large scale
canalisation of imports through State Trading Corporation
and the Imports are made at the instance of the Government
it being a Government undertaking being run exclusively by
the Government as a monopoly. The consximers have no voice in

1 Annual Report of the State Trading Corporation, 1965-66.

2 Salny, H.C., India's Foreign Trade, p. 248.
 87

the matter and they have to pay the prices demanded by the
Government. The State Trading Corporation tremsfers its
responsibility to the Government departments where prices
are fixed. The Corporation is said to charge heavy
commissions for the services rendered which results in huge
profits for it. In many instances the main objective is
profit instead of public good. It is said that the State
Trading Corporation has also evolved several dubious practices
of selling goods on the high seas and avoiding sales tax and
finally getting them cleared frcxn the customs on its own
licence. Thus, instead of checking the over invoicing of
inserts and cutting unintended trading profits, the State
Trading Corporation itself is earning enormous profits. The
goal of price establisation also remains unattained. The
State Trading Corporation is said to have used its profits
from imports to compensate for the losses from exports.

The Estimates Committee of the Lok Sabha« set up from

time to time, has brought out a niomber of weak points of
the State Trading Corporation, in regard to defective purchas-
ing procedure, inadequate attention being paid by the
Corporation to the business interests of the country (and
especially the private sector), the Corporation's encroach-
ment on the fields of private entrepreneures and a number of
related things. The Corporation has, however, attempted to

1 Chairman's Speech, Annual Report, State Tradina

Corporation, 1969. ^
 88

remove these drawbacks to a great extent.

AS it is discussed earlier, the State Trading Corpora-

tion provides requisit facilities to the small scale indus-
tries, entreprenures, exporters to expand potential markets
in different foreign countries. In this way foreign trade
from these countries has been increasing substantially. The
State Trading Corporation also provides significant help
to the different export promotion agencies which are newly
established in the country.

The perfomiarice of STC is shown in Table 1 and Table 2

through the imports and exports of this Organisation and
its share in India's trade.
 89

TABLE 1

S T C ' s S h a r e of I n d i a ' s T r a d e i n I m p o r t between

1956-57 t o 1984-85

(Rs. in crores)
India's Total STC's Total STC's Share in
Years Imports India's Imports
Imports
1956-57 832.45 3.40 0.40 %
1960-61 1,139.69 26.69 2.34 %
1964-65 1,349.03 33.93 2.34 %
1968-69 1,908.63 114.06 5.97 %
1972-73 1,867.44 159.20 8.52 %
1976-77 5,073.79 301.25 5.93 %
1986-81 12,560.29 1-,214.04 9.66 %
1984-85 17,092.10 2,,119.00 12.39.%

Data set in table 1 reveals that in 1956-57 India's

total imports stood at Rs. 832.45 crores whereas total imports
through STC ammounted to Rs. 3,40 crores which constitutes
0.4 per cent of India's total imr^orts. In 1960-61 the relative
share of STC in India's total imports went up to 2,34 per
cent and showed further improvement in 1968-69 where it stood
at 5,97 per cent of the total. In 1972-73 this total further
gone up to 8.52 per cent, in 1976-77 it declined by nearly
5,0 per cent and again went up to 9.66 per cent. In 1984-85
the share further went up to 12.39 per cent of India's total
Imports. This all indicates that the relative share of STC
in India's total imports has been gradually increasing and
there are indications that this situation will be more
appreciable in years to come.
 90

Table 2

STC's Share of India's Trade in Export Between

1956-57 to 1984-85

(Rs. in crores)
Yi.ar.i India's Total STC's Total]STC's Share in
^^^^^ Imports Imports 1 India's Imports

1956-57 612.52 05.79 0.94 %

1960-61 660.22 36.69 5.55 %
1964-65 816.30 10.51 1.28 %
196§-69 1,357.87 48.46 3.56 %
1972-73 1,970.83 170.10 8.63 %
1976-77 5,142.25 665,60 12.94 %
1980-81 6,710.71 440.49 6.56 %
1984-85 11,555.00 719.56 6.22 %

Statistics given in Table 2 indicates that in 1956-57

the relative share of STC in India's total exports w^s 0.94
per cent whereas in 1984-85 this share gone up to 6.22 per
cent. The most revealing feature of this table is the sharp
fluctuations in the export performance of STC which range
from 1 to 12 per cent. The most bleaking year was the year
of 1964-65 when its relative share to India's total exports
stood at only 1.28 per cent and the most bright year was
the year 1976-77 when it recorded an all time high figures of
12.94 per cent. The year 1972-73 also reveals a fairly
improved picture when the relative share of STC stood at
8.63 per cent. Hence, it is brought out that STC's performance
in relation to India's total export has not been satisfactory
which yields a bold and imaginative policy so that there
should be a steady growth in India's total export through
STC.
 91

FUNCTIONS OF STATE TRADING CORPORATION

The main function of State Trading Corporation (STC) is

to broaden and enlarge the scope of India's exports and to
arrange for essential imports on economical basis. The
Corporation engages both in direct and indirect trade and
brings buyers and sellers together. It therefore, assists in
the conclusion and implementation of contracts, obtaining of
Insert licences, guranteeing of quality and performance, and
uses its goods offices in matters like settlements of
disputes.

Objectives

The objects of the State Trading Corporation of India, as

laid down in the Memorandum of Association, are as followsx

1. To organise and undertake trade generally with

state trading countries as well as other countries
in commodities entrusted to the Company for such
purpose by the Union Government from time to time and
to undertake the purchase, sale and transport of such
commodities in India or anywhere else in the world.

2, To xindertake promotion of exports generally, including

exports to existing markets whether of traditional
commodity or any other, to explore new markets for
traditional items of export and develop exports "of
new items with a view to maintaining, diversifying and
expanding the export trade.
 92

3, To undertake, at the instance of the Union Government,

import and/or internal distribution of any ccarunodities
in short supply with a view to stablishing prices and
rationalising distribution.

4, To generally implement such special arrangements for

Import, export, internal trade and/or distribution of
particular commodities as the Union Government may
specify in the public interest.

5, To barter, exchange, pledge, manipulate, treat,

^prepare and deal in merchandise, commodities and
' articles of all kinds and to carry on any kind of
commercial and/or financial business as the Company
may determine from time to time,

6, To subscribe for, take or otherwise acquire, and hold

shares, stocks, debentures, or other securities of any
other Conpany, Cooperative Society or Society registered
under the Societies Registration Act 1860.

7, To lend and advance money or give credit to such

persons or companies on such terms as may seem to be
expedient, and in particular to customers and others
having dealings with the Company, and to guarantee the
performance of any contract or obligation and the
payment of money or by any such persons or companies
and generally to give guarantees and indemnities.

8, To promote and establish organisation, advisory board

.and other suitable bodies as may be deemed necessary
in order to carry out the aforesaid objects of the
Corporation effectively.

9, To hold or assist in holding exhibitions in India and

elsewhere of the products and articles in which the
Company is interested.
 93

10. To collect and circulate statistics and other infor-.

mation relating to trade, commerce and Industry.

11. To buy, sell, carry on the business of manufacture and

deal in goods, ware and merchandise including all
convenience of necessaries of life which may be used
or required by workmen or others whether employed by
the Company or not and to open and keep shops or stores,
and generally to carry on manufacturing, trading or
other business.

12. To overcome the difficulties experienced in expanding

India's foreign trade, particularly with Communist
countries.

13, To maintain a steady price level and equilibrium

between supply and demand,

14. To supplement private trading.

15. To undertake the processing, conversion, fabrication,

manufacture and production of particular categories of
goods, commodities merchandise and articles as may be
directed by the Union Government from time to time,

16. To install, set up, construct, acquire, purchase, hire,

maintain, run, operate and establish in India and/or abroad
such machinery, plants, works, factories, equipments,
apparatus and appliances and to do such other acts as
may be necessary, and/or convenient for the Company
for carrying on or is required by any customer or
persons dealing with the Company and to experiment with
and to render marketable, process, convert, fabricate
and manufacture such articles, commodities and goods as
may be necessary or may seem to the Company capable of
being undertake conveniently in furtherance of its
 94

objects or may be calculated directly or indirectly to

enhance the value of such articles, commodities and
goods.

17. To manufacture, store, maintain, sell, buy, repair,

alter, exchange, let on hire, export, import and deal
in all kinds of articles and things including all
kinds of conveyance and all components, parts, fittings,
tools, implements, accessories, materials and all
articles and things used or capable of being used in
connection therewith in any way whatever which may be
required for the purpose of any business of the Company
or are commonly supplied, dealt with by persons engaged
in any such business and which may be capable of being
profitable deal with in connection with any of the
business of the Company.

The above objectives of the State Trading Corporacion of

India* mentioned in its Memorandum of Association, can be
classified under the following six main heads:

1, Export
2, Import
3, International Trade
4, Trade Promotion Agreement
5, Export Aid to Small Industries
6, Participation in Export-oriented Corporations

Important functions falling under each of these heads are

mentioned below:

1 All the objectives mentioned above (1 to 17) are from

Memorandum and Articles of Association of State Trading
Corporation of India, pp. 1-17.
 95

1. Export

a) To promote export of traditional items, to introduce

non-traditional items in the world markets and to
find out new markets for Indian exports,

h\ To facilitate and organise export of difficult-to-

sell-items by linking essential imports with additional
exports under special trade promotion agreements, etc.

c) To organise production to meet export demands and to

help production units in overcoming difficulties of
procuring raw materials and other essential requirements.

d) To develop new lines of exports,

e) To ensure implementation of trade plans with East

European countries.

f) To help local producers by procuring at reasonable

prices and to hold stocks to maintain ultimate production
at optimum level of commodities with high export
potential, thus avoiding dislocation in production,
maintaining adequate availability for export and
ensuring a fair price to the local producers,

g) To participate In fairs and exhibitions abroad so as

to create atmosphere for expansion of exports and for
introducing new products in foreign markets.

2, Imports

a) To import capital goods, industrial raw materials and

certain scarce commodities required for the economic
development of the country.
 96

b) To import items which are canalised by the Government

through this Corporation so as to ensure that adequate
supplies at the right time and at the most economical
prices are made and distributed to the industries and
other users in a co-ordinated manner.

c) To undertake import of commodities where bulk purchase

would give better terms.

d) To undertake imports from state trading countries or

where monopolies are involved.

e)' To import commodities which are in short supply in

the country.

f) To import speculative and high profit margin items with

a view, inter alia, to stablise the prices and to do
distribution of such commodities in an organised manner
at fair prices.

g) To ensure implementation of trade plans with the East

Enropean countries and other special agreements.

3. International Trade

a) To undertake international trade in certain commodities

like imported cars.

b) To undertake price support and buffer stock operations

with a view to ensuring fair prices to the growers of
certain agricultural commodities, to stablise internal
production and to sustain foreign demand.

4. Trade Promotion Agreements

To arrange for essential imports against additional

exports of traditional and non-traditional items which
 97

are specified in special agreements.

5. Export Aid to Small Industries

To ai.sist the small scale manufactures in exporting their

products by giving wide publicity to their products
abroad and by arranging attractive packing, providing
credit facilities, helping them in matters of shipping
and exploring possibilities of exporting their products
to various countries.

6, ' Participation in Export-oriented Corporations

To lend increasing support in the form of financial and

organisational assistance to specialised export agencies
like the Handicraft and Handloom Export Corporation.

Organizational Structure of the S.T.C.

The administrative structure of the Corporation is vested

in its Board of Directors which consists of executive and
non-executive directors from the ministries appointed by the
Central Government, In other words the Corporation is a wholly
owned Goveimment Company and operates under the Companies Act,
All executive authority of the Board and its implements are
vested in its chairman. To assist the Chairman, there are
Executive Directors, Group Executives, Chief Marketing
Managers, Chief Finance Managers, Regional and Branch Managers
in India and abroad along with other managers and members of
the staff.
 98

The Board is responsible for deciding the policy of the

S.T.C. and its Chairman is authorised to exercise all executive
authority for the implementation of the policies laid down
by the Board.

The Board of Directors of the Corporation can# in terms

of the Articles of Association, exercise all powers as the board
of any company in the private sector can exercise. The
powers of the Board are such as to make the Corporation auto-
nomous, in its operations, except that the Government has
reserved to itself some powers. The decisions of the Board in
such matters require the approval of the Goveimment. Besides,
the Government has also reserved to itself the powers to give
directions to the Corporation with regard to finance, conduct
of commercial operations of the Corporation etc.

The Board works at three levels (Pig. 1 ) . The full Board

consists of full time Directors as well as non-executive
Directors representing Government interest from rainisteries
including Finance, Commerce, Chemicals and Fertilizers, Food,
Reserve Bank of India etc. The Board meets periodically to
review operation (normally at least once a month) , decides
larger policy issues and discusses matters pertaining to
senior levels of management. At the next level, there is
a Committee of Management {C(M) consisting of Executive
Directors, functioning with delegated powers from the full Board.

1 See Appendix - Article of Association for detailed explana-

tion of the powers of the Board,
 •rl 1 0) 99
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 100

They work jointly as a team on all matters — operational,

financial, organisational and personnel. At the third
level, each Director discharges his individual functional
responsibility, keeping direct link with the Chairman, but of
course, with tlie responsibility of keeping the Conunlttee of
Management informed. Thi.* COM meets weekly and also on an
ad hock basis whenever the need arises. Quorum for the
meeting is three, one of them being the Finance Director,

The President of India may appoint one of the Directors

to be the Chairman of the Board of Directors and another
Director as its Managing Director and one or more Directors
as Executive Directors and also nominates members of the
Committees of one or more Directors as members of the Committees
on such terms and on such remuneration as he may determine
from time to time. The President may remove any of them from
the office and appoint some other person in their place whenever
he likes.

The Division Making Process and Delegation of

Power by the Board of Directors

The functions/powers of these Committees are described in

the schedule of delegation of powers of the S.T.C, which
explains that the Board of Directors delegate powers to the
Executive Committee/Comiuittce/Dircctors/Managers which are
accountable to the parliament. These Cc«nmittees/Dircctors/
Managers further delegate their powers to various sub-Committees/
Boards (Fig. 2) ,
 101

The decision making process of the Corporation is similar

to »Line Organisation', i.e., the final decision making powers
vest with the President of India through the Parliament and
its Board of Directors. Usually/ these Committees/Boards
meet from time to time to discuss various proposals and to
take decision thereon. These divisions put up their proposals
duly vetted by Finance/Law as may be necessary and the notes
duly approved by concerned CGM/Director are submitted to
Board/Committees for consideration and decision, and then to
the Executive Committee and Board of Directors, This can be
illustrated in Figure The functions/powers of these
Committees are described in details in the Schedule of
delegation of powers.

Formation of the Board of Directors

The following is an extract from the Memorandxim relating

to the Board of Directors of the State Trading Corporation:

1. Subject to the provisions of section 252 of the Act

the President shall, from time to time, determine in writing
the number of Directors of the Company which shall not be
more than 14 and less than 4, The Directors are not required
to hold any qualification shares.

2, Chairman of the Board of Directors shall be appointed by

the President, and other directors including the Managing
Directors, if any and the Financial Adviser, if the Financial
 102

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 104

Adviser is a member of the Board of Directors shall be

appointed by him in consultation with the Chairman. Appoint-

ments of Directors, including Chairman shall be in such number

and for such period as the President may determine from time

to time. The Directors including the Chairman so appointed

shall be entitled for such pay and allowances, travelling

allowances,leave, provident fund, medical and other facilities

as may be determined by the President at the time of their

appointment or thereafter.

3. The President shall have the power to remove any Director

including the Chairman and Managing Director from office at

any time in his absolute discretion.

4. The President shall have the right to fill any vacancy

in the office of a Director caused by retirement, removal,

resignation or otherwise.

5. The office of a Director shall be vacated if:

a) he is found to be unsound of mind by a court of a

competent jurisdiction;
b) he applied to be adjudicated an Insolvent;
c) he is adjudged an insolvent;
d) he is convicted by a court in India of any offence
and is sentenced in respect thereof to imprisonment
for not less than six months,
e) he absents himself from three consecutive meetings
of the Board of Directors or from all meetings of the
Board for a continuous period of three months,
whichever is longer, without obtaining leave of
absence from the Board.
f) he or any firm in which he Is a partner or any
private company of which he is Director accepts a
 105

loan or any guarantee or security for a loan, from

the Company in contravention of aoction 245 of the
Act.
g) he tails to disclose the nature of his concern or
interest in any contract or arrangement or
proposed contract or arrangement, entered into
or to be entered into by or on behalf of the
company as required under section 299 of the Act.
h) he becomes disqualified by an order of Court under
section 203 o± the Act.
i) he is removed in persuance of the section 284 of
the Act.
j) he is concerned or participates in the profits
of any contract with the company; provided,
however, no Director shall vacate his office by
reason of his becoming a member of any company
which has entered into contract with or done any
work for the company of which he is Director, but
a Director shall not vote in respect of any such
contract or work and if he does so vote his vove
shall not be counted.

Disqualifications referred to in sub-clause (c), (d)

and (h) above shall not take effect:

a) for thirty days from the date of adjudication,

sentence or order,
b) when any appeal or petition is preferred within
the thirty days aforesaid against the adjudicate
sentence or conviction resulting in the sentence
or order, until the expiry of seven days from the
date on which such appeal or petition is disposed
of, or
c) when within the seven days aforesaid, any further
appeal or petition is preferred in respect of the
adjudication, sentence, conviction, or order and
the appeal or petition, if allowed, would result
in the removal of the disqualification, until
such further appeal or petition is disposed of.

5, In place of a Director who is out of India or is about

to out of India or who expects to be absent for not less

than three months from the State in which meeting of the

 106

Directors are ordinarily held, the Board may appoint with

the prior approval of the President any person to be an
Alternate Director during his absence out of India or his
absence of not less than three months from the State in
which the meeting of the Directors are ordinarily held and
such appointment shall have effect whilst he holds office as
an Alternate Director shall be entitled to notice of meeting
of the Directors and shall if so fact vacate office if and
wh^n" the original Director returns India or the State or
votes office as a Director.

7. The President may appoint one of the Directors to be

the Chairman of the Board ofDirectors and another Director as
ManagingDirector and one Director as Executive Director and also
constitute Committees of one or more Directors, for such terms
and on such remuneration as he may determine from time to
time and may remove him or them from office and appoint
another/others in his/their place,

8. The Board may from time to time entrust to and confer

upon the ChairmanAlanaging Director, Directors, General
Manager or Managers and Financial Adviser and Chief Accounts
Officer, for the time being such of the powers execercisable
under these Article:* by thu Board of Directors as it may think
fit and may confer such powers for such times and to be
exercised for such object and purpose and upon such .terms and
conditions and with such restrictions as it may think expedient.
 107

and it may confer such pov/ers for such time and to be exercised
for such object and purpose and upon such terms and conditions
and with such restrictions as it may think expedient, and it
may confer such powers either collaterally with or to the
exclusion of and in Substitution for all or any of the powers
of the Directors in that behalf, and may from time to time,
revoke, withdraw, alter or vary all or any such powers.

The bucincsii of the company shall be managed by the Board

who .may exercise all such powers of the company as are not, by
the Companies Act 1966, or any statutory modification thereof
for the time being in force or by these Articles required to
be exercised by the Company in gene:ai meetings, subject
nevertheless to the provisions of these Articles, to the
provisions of the said Act and the directives if any, the
President may issue from time to time and to such regulation
being not inwonsistant with the aforesaid provisions as may
be prescribed by the company in general meeting but no
regulation made by the Company in general meeting shall
invalidate any prior act of the Directors which would have
been valid if that regulation had not been made.

The overall executive organisational structure is depicted

in figure 4,

Subsidiaries of State Trading Corporation

For increasing State participation in the courvtry's export

1 Ibid., p. 57.
 108

State Trading Corporation's Offices in India

The Head Office of the STC is in New Delhi at Chandralok,

36 Janpath.

Branch Offices Overseas Offices

AMERICA
Adipur
New York
Bombay
WESTERN EUROPE
Kanpur
London
Tuticorin Frankfurt
Agra Paris,

Calcutta EASTERN EUROPE

Madras Moscow
East Berlin
Visakhapatnam
Budapest
Abmadabad
AFRICA
Cochin
N ai robi
New Delhi Dar-as-Salaam
Bangalore
WEST ASIA
Guntur Kuwait
Jaipur Baghdad
Jeddah

SOUTH EAST ASIA

Colombo
Decca
Singapore
Sydney
Tokyo
Hongkong
 109

and import, the State Trading Corporation of India (STC) was

registered in 1956 under the Indian Companies Act. It has
the following subsidiaries:

1. Projects and Equipment Corporation (PEC)

Incorporated in 1971, This subsidiary of the STC handles

turnXey projects abroad and the export of sophisticated
engineering equipment and railway rolling stock and equipment.

Manned by engineers with wide experience in various

technical disciplines and backed by a reliable supply base
th© PEC is fully equipped to render a diverse range of services
in the wide spectrum of turnkey projects and engineering
products.

Product development and quality control are only a part

of PEC'S services which include marketing, negotiating,
contracting, financing, execution of tbrnkey projects, after-
sales services, warehousing and shipment.

Countries benefiting from its expertise include Korea,

Taiwan, Philippines, Malaysia, Thailand, Burma, Sri Lanka,
Bangladesh, Nigeria, Zambia, Sudan, Iran, Hungry, Yogoalavia,
Libya, Indonesia, Algeria and Vietnam, It is exporting railway
equipment, engineering prodxicts and undertaking turnkey
projects all over the world.

1 State Trading Corpomuion's Publication.

 110

2. The State Chemicals and Pharmaceuticals

Corporation of India Ltd. (CPC)

The Chemicals and Pharroacuticals Corpotation (CPC) was

formed as a subsidiary of the STC to pay special attention
required in the import of over 1,000 items. Further it was
felt that exports of chemical items could be increased by
paying concentrated attention,

3, . -The Cashew Corporation of India Ltd. (CCI)

Set up in August 1970 in the wake of the Indian Govern-

ment's decision to canalise imports of raw cashew for the
benefit of export oriented cashew processing industry in
the country, CCI has lived up to expectations.

In the past, despite difficult situations in the inter-

national market, the CCI has succeeded in maintaining a
reasonable level of supply of raw nuts to many processing
units in India.

Experts are striving to identify and develop new sources

of supply for raw cashew and new export markets for cashew
kernels.

The Cashew Corporation (CCI) was formed as a subsidiary

to handle effectively the bulk import of raw cashew nuts to
meet the specific needs of the export oriented industry and
also keeping in view its turnover. It is handling the import
of raw cashew nuts and the export of cashew kernels.
 Ill

The Handicrafts and Handlooms Exports Corporation

of India Ltd. (HHEC)

Formed in 1962, HHEC has played a major role in develop-

ing and promoting exports of handicrafts and handloom products
from India. The Handicrafts and Handlooms Exports Corporation
was attached to the STC which provides financial support
required by it in its export operations.

Thanks to its pioneering work in developing new qualities/

designs in fabrics and introducing Persian designs in hand-
knotted carpets, the HHEC has been acknowledge as a pace-
setter in these fields.

In collaboration with world renowned designers, the

HHEC has given India an edge over others in the highly compe-
tiliive fashion markets of the U.S.A., the EEC countries and
Japan.

Its subsidiary, the Central Cottage Industries Corporation

of India (CCIC) undertakes retail sales for promoting the
crafts in India and thereby helps in Improving the economic
condition and social status of artisans, craftsman and weavers.
It is exporting carpets, traditional Indian handicrafts and
handloom products.

The Corporation ha& at present four subsidiaries, viz..

The Handicrafts and Handlooms Exports Corp6ration of India
Ltd, (HHEC), Project and Equipment Corporation of India Ltd,
 112

(PEC), Cashew Corporation of India Ltd. (CCI), and Central

Cottage Industries Corporation of India Ltd, (CCIC), a sub-
sidiary of HHEC. Turnover of these subsidiaries is shown
below:

Rs.in crores
1983-84 1984-85
H.H.E.C. ... 129.66 129.91
P.E.C. ... 92.30 103.42
C.C.I. ... 4.29 4.23
C.C.I.C. ... 8.44 9.50*
* Provisional
Source; Annual Report of State Trading Corpora-
tion, p. 13.

HHEC's direct exports of carpets, handicrafts, hartdlocwis

and ready-to-wear have gone up by Rs. 3.63 crores (24.8%) in
1984-85 over that of 1983-84 while there was a shortfall
under other items.

The Project Equipment Corporation has crossed a milestone

by registering the highest ever turnover of Rs, 103.42 crores
as against Rs. 92.30 crores during the last year representing
an increase of 11.5 %. The turnover comprises export sales
including overseas project sales of Rs. 102.26 crores and
import Sales of Rs. 0.86 crores. Exception of overseas turn-
key project and mechanical. Electrical equipment and
railway equipment exports are the main constituents of this
achievement.

In spite of stiff competition in world markets, the

 113

Corporation booked fresh orders worth Rs. 68.36 crores during

the year as against Rs. 60.80 crores in the previous year
indicating a growth of 12 %. Net profit of the P.E.G. during
the year increased to Rs. 1.88 crores from Rs. 1.35 crores in
the previous year.

The total turnover of Cashew Corporation of India Ltd.

(CCI) for 1984-85 was Rs. 4.23 crores which is marginally
lower than the turnover of Rs. 4.29 crores during the previous
•year. The shortfall was due to delay in receipt of L/C for
effecting shipments during March 1985. The Corporation's
main drive to sell cashews continued in Gulf« Prance, Japan#
Australia, Hong Kong and Singapore markets which yielded good
results. Salted/roasted cashews and mixed nuts in easy to open
consumer packs valued at Rs. 0.07 crores were exported to
Kuwait and Japan. The Corporation did not make any imports
during the year.

The Corporation made a trading profit of Rs. 0,17 crores

during the year against Rs. 0,09 crores during the previous
year.

In pursuance of the decision of STC, the Corporation Is

evolving a suitable strategy for diversifying its activities
into food business with emphasis on value added exports.
 114

Table 3

STATE TRADING CORPORATION AND ITS SUBSIDIARIES

S a l e s Tuimover o f STC's Group

(Rs. In crores)
1970-71 1975-76 1980-81 1984-85

S.T.C.
Exports 70.5 760.1 440.5 719,5
Imports 141.9 217.0 1,214.0 2,118.9
Domestic 5.3 3.9 15.4 26.9

217.8 981.0 1,669.9 2,865.3

SUBSIDIARIES
P.B.C.

Exports N.A. 28.6 38.3 102.5

In5>orts N.A. 11.0 0.2 0.8
Domestic N.A, N.A. 0.1 -

39.6 38.6 103.0

C.C.I.
Exports N.A. 1.6 6.2 4.2
Imports 11.4 37.6 17.2

11.4 39.2 23.4 4.2

H.H.E.C•
Exports 2.9 32.6 26.5 129.2
Domestic 0.8 0.3 1.0 0.6

3.7 32.9 27.S ' 129.6

(Contd.)
 115

C.P.C*
Exports N.A. N,A. 9.5
Imports N.A. N.A. 110.7
120.2

Exports N.A. N.A. 0.4 N.A.

Domeatic N.A. N.A. 5.5 N.A.

5.9

S.T.C. Group
Exports 37.4 822.9 521.4 955.4
Imports 153.3 265.6 1.332.1 2,119.7
Domestic 6.1 4.2 22.0 27.5
232.3 1,092,7 1,875.5 3,102,6

* - With effect from 1.4.1981 C.P.C, was merged with STC.

NA • Not available.

1. HHEC: Handicrafts and Handlooms Exports Corporation became the

first subsidiary of STC from 1st June 1962. It formed a
subsidiary of its own. Central Cottage Industries Corpo-
ration (CCIC) w.e.f. 1st April, 1976.
2. CCI: Caahew Corporation of India, registered on 18th August,
1970.
3. PEC: Project Equipment Corporation of India, set up on 21st
April, 1971.
4. CPC; State Chemicals and Pharmaceuticals Corporation of
India, registered on 1st January 1976 and started func-
tioning w.e.f. 1st April 1976 and merged with STC
with effect from 1st April, 1981.
Compiled by the author from the following:
1. Annual Reports of STC - Several Issues.
2. Handbook of Statistics of STC, 1979-80 to 1983-84. •
 116

Conclusion

The above analysis shows that the State Trading Corpo-

ration of India has been changed from a Joint Stock Company
to a Public Corporation.

The success of the State Trading Corporation depends

considerably on the quality of the Board which is responsible
for its direction and governance. To avoid overlapping of
responsibility and to maintain integrity of political life,
legislators should be excluded from the membership of the
Board. All members of the Board should be persons of high
calibre and business ability. The Chairman of the Board
should not only be of high calibre but should also have a
towering personality to exercise the influence of his presence
in the board as well as to resist the informal ministerial
pressures on his independent actions performed in accordance
with the policy of the Board,

The Corporation has achieved tremendous success in reach-

ing its goal of diversifying India's trade with East European
countries. With the help of its subsidiaries, the Corporation
exports several conunodities to their destinations.

The Corporation exports several new commodities to

different countries. It has made it possible to import
various essential items and capital equipment without putting
>
a drain on the country's scarce foreign exchange resources
 117

It has brought a new trend in India's export performance

by promoting the export of commodities handled by it. It
also provides requisite facilities to the private
entrepreneures and exporters to explore potential markets in
different regions. As a result, India's foreign trade with
these regions has been Increasing substantially. The
Corporation has also been providing significant help to the
different export promotion agencies established in the
coTintry.

In this connection the next chapter deals with the role

of STC in the Export promotion of India.